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TIMINGTRUTH.COM NEWSLETTER 2011-02-08
CURRENT SIGNAL TRENDS: The generally upward trend that began around April 2009 has all appearances of continuing. The market correction (a temporary adjustment to a long term trend) was in fact just that. However, every downward trend change begins looking just like a short term correction. This is why we monitor the markets.
NEWS:
News of late has been dominated by political changes in Tunisia and Egypt but there was one financial story of interest. Remember Lloyd Blankfein, CEO of Goldman-Sachs? Remember the furor over the outrageous pay schemes of the very bankers who may have participated in the recent, global financial crisis? Blankfein was one of them. No doubt you will be happy to know that he received a 233% wage increase of $2m and a $12.6m bonus, a 43% increase. This all in spite of the fact that Goldman's profits fell 38% and its stock prices rose less than 5%, underperforming similar banks like Morgan Stanley and Citigroup. Oh, Blankfein was not the only recipient of this act of generosity. Others bankers at Goldman received the same generous courtesy. Just thought you might want to know.
LONG TERM MARKET TRENDS: This month's graph shows how global markets perform differently. All the markets we monitor experienced a correction in Nov 2010 which is when this graph starts. You can see all the markets returned to their upward trend in December 2010. Here are the significant observations. - VOO (S&P 500), VTI (Total US Market), and VBR (US Small Capital) declined the least during the correction and therefore show the greatest return for this three month period.
- VEA (European & Pacific Markets) and VNQ (US Real Estate) declined more but actually recovered the same as the first group. The three month return is less because they lost more in November.
- But notice that VWO (Emerging Markets) lost the same as the second group but failed to recover those loses. Most likely causes are the fears of inflation and political unrest which impact these emerging markets more than the established markets of the US and Europe.
OUR STRATEGY INSIGHTS: We begin this year by restating the our basic principles. TimingTruth's savings and investment practices are based on these four principles. We believe these principles reflect the proper character to succeed.
- Responsible - You must decide to setup a retirement account and then do it
Unless you decide to take responsibility for your own retirement nothing will happen. Nobody cares for your retirement as much as you, regardless of what they might tell you.
- Conscientious - You must manage your account if you hope to maximize your gains
The traditional strategy (Buy & Hold) no longer works as it once did. We at TimingTruth believe today's investors must conscientiously manage their investments in accord with the long term economic cycles
rather than be carried along by them. - Disciplined - You must regularly contribute to your retirement account
Saving for your retirement requires endurance and consistency. It should be evident that if you rarely contribute to your account that it will rarely grow. Remember that you are first, saving for your retirement and second, investing wisely so that the savings will grow. - Purposeful - You must be patient and not greedy
People who are impatient or greedy typically make emotional decisions. Emotional decisions are usually not profitable decisions when it comes to investing. Act with purpose, not from emotion.
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